NAIROBI, Oct. 14 (Xinhua) -- Kenya has projected to borrow 355 billion shillings (about 2.75 billion U.S. dollars) from external sources in the financial year 2024/2025, the National Treasury said Monday.
The money would be borrowed to cater for part of the 5.96 billion dollar fiscal deficit in the aforementioned financial year, according to the Treasury's Annual Borrowing Plan for the 2024/2025 fiscal year released in Nairobi, Kenya's capital.
From the domestic market, the Treasury said it would borrow 3.21 billion dollars to cater for the deficit, which is 5.6 percent of the country's gross domestic product (GDP).
Kenya's total public debt stands at 81.8 billion dollars, with external debt accounting for 48.8 percent of the total.
To manage external debt, the Treasury said the Kenyan government will engage in debt swaps, debt buybacks and debt refinancing strategies.
The institution said Kenya had engaged in debt swaps with Italy and Germany before, with Italy converting 44 million euros (about 48 million U.S. dollars) of debt into funding for development projects.
Similarly, Germany converted 60 million euros for similar development purposes.
Kenya in February completed a successful Eurobond issuance and buyback transaction to refinance its 1.5 billion-dollar Eurobond.
"The government aims to reduce the fiscal deficit from the current 5.6 percent of the GDP to 4.3 percent in the financial year 2024/2025," said John Mbadi, cabinet secretary in the National Treasury and Economic Planning Ministry. "The fiscal consolidation is expected to reduce debt vulnerabilities in the medium term and improve the debt-to-GDP ratio toward a more sustainable level." ■